Sustainability Bites

There is no such thing as a free lunch

Have we learnt nothing? Don’t put all your (biodiversity) ‘eggs’ into a single (market) ‘basket’!

by | May 4, 2023 | 0 comments

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By David Salt

Our planet’s biodiversity is in big trouble. Some, like the Australian Government, believe the answer to saving Nature lies in market forces via the creation of a market for Nature restoration. Other’s believe this is a fool’s errand. Still others agree the ‘market’ path is fraught but we can’t afford not to give it a go.

Where lies the truth?

I’ll be honest and say I haven’t got a clue where the truth lies, yet I’m hopeful that a little creative thinking and the creation of new Nature markets might lead to more resources for better conservation outcomes.

My heart tells me that it would be a good thing if Nature markets could raise $137 billion for restoration in the coming decades.

But my head tells me the evidence for success down this route is weak (or even negative) and that when consultants like PwC Australia put forward a figure like $137 billion without evidence or credible economic analysis then we’re definitely in the realm of speculative and wishful thinking.

Though this is not just an Australian game. It’s happening all over the world. In the UK, for example, the Government is setting up a scheme that creates ‘habitat banks’, parcels of land where efforts are made to restore and protect Nature. The plan is that these efforts are quantified (by ecologists) and then packaged into tradeable units and sold as credits to housing developers or road builders seeking to offset their environmental impact. The UK has passed a new law that comes into effect later this year that requires developers in England to show they can deliver a 10% net gain in biodiversity in order to get planning permission. Sounds good in principle.

The Government is betting that scores of habitat banks across England can generate credits worth about £300 million per year. The new market also will go some way to meeting the Government’s goal of growing annual private investment in Nature to £1 billion by 2030.

“Biodiversity is about to be one of the most significant asset classes in the world,” said one asset management chief executive officer whose firm plans to trade big in biodiversity credits. Sounds fabulous, doesn’t it? Then I read this firm is based in the Cayman Islands and the spectre of dodgy, tax evading, fly-by-night companies filled my mind.

So, before we commit all our ‘biodiversity eggs’ to the ‘market basket’ and leave saving Nature to the market traders, could we quickly reflect on what’s been done in the past to save biodiversity? How did we attempt to protect Nature before markets were put forward as our road to salvation?

Lock it up

Following the Second World War we were more worried about building a strong economy than anything else. In any case, back then there was so much Nature around it didn’t seem to matter if bits of it were sacrificed for development. Having said that, some places contained such outstanding beauty that there was strong support for placing them in reserves to protect them from human damage.

This was a time of command and control (1950s till now, really). Humans were in command and Nature was to be confined and controlled. Bits of it were locked away behind fences in national parks, and the rest could look after itself. And the bits in parks were prioritized for Nature, humans living in these areas were kicked out, an approach sometimes referred to as the ‘Yellowstone Model’ An example of this was the expulsion of the Maasai people from the Serengeti National Park.

These days most governments are more sensitive to the needs of indigenous peoples and no longer kick them out of national parks if this was their traditional land; however, in general, national parks are run on dwindling, inadequate budgets and are not meeting their purpose of protecting Nature in perpetuity. If you want one example of this consider Kakadu National Park in Australia; it’s one of the jewels of our national park estate and, after many years of neglect, is now regarded by many as being in a state of crisis.

Pass a law or two

Locking up Nature went some way to slowing its degradation inside the parks but outside their boundaries it was a different story. The indiscriminate use of chemicals to maximise our food crops was progressively poisoning our rivers and land, and passing up food chains. Rachel Carson’s Silent Spring came out in the early 1960s and sent out a clarion call of alarm; Nature was wilting under unbounded industrial growth and the consequences was an environment unfit to live in.

And so laws began being passed that prevented activities that caused clear and unacceptable harm. Possibly two of the best examples of this came out of the US. In 1969 the US Government passed The National Environmental Policy Act (NEPA) requiring environmental impact studies for all new big developments. Then, in 1973 the US Government passed the Endangered Species Act (ESA). The degradation didn’t stop but the clearest most egregious forms of environmental vandalism was now illegal in the USA (and many other countries followed suit with similar legislation).

But laws are only good as the support they receive by government because without enforcement and compliance they can be ignored. And governments will always be lobbied by vested interests who don’t like the laws.

Take the US Endangered Species Act. Many consider it to be the most powerful environmental law in the world. It was described as applying the ‘Noah Principle’: all species are fundamentally equal, and everything can and should be saved regardless of its importance to humans.

Sounded great in principle but when the proposed endangered species listing of the northern spotted owl and some salmon varieties in the 1980s threatened the economic interests of powerful timber and fishing industries, attempt were made to weaken the law. There followed a serious and long-term contest between the rights of humans to develop economic resources versus the rights of species to exist. That contest is still in play today.

Sign a convention

As stocks of environmental awareness increased along with improved environmental monitoring, discussions were had between and within countries to better understand how much Nature could be leaned upon before it stopped providing us with our basic needs. The notion of ‘sustainable development’ took form over the 70s to the 80s, and international conventions were developed and signed up to by most nations.

Most notable among these was the Ramsar Convention on Wetlands in 1971 and the Convention on Biological Diversity in 1992. Both are still in force today and both generate a lot of activity, nice words, goodwill and countless meetings. Neither have prevented the accelerating loss of Nature (wetlands or species) but it might be argued that it could be worse without them, and at least they raise awareness and provide a platform for people to discuss things.

Put a dollar on it

Moving into the 21st Century it has become abundantly apparent that national reserves, laws and conventions were not saving nature and that we needed additional strategies. Unsurprisingly, people began discussing the economic value of Nature. The notion of ‘ecosystem services’ arose, given a big boost during the Millennium Ecosystem Assessment; and international studies such as The Economics of Ecosystems and Biodiversity (TEEB) were undertaken.

These arguments had strong rationalist foundations, but along with the laws and conventions that preceded them, they achieved little in slowing the decline of nature, which now appears to be more of an avalanche.

Let the market decide

How do we save Nature? Let me count the ways. We’ve set bits of the planet aside in reserves and said in these bits, Nature comes first. It has slowed the decline within the reserves but not arrested it, and provides little protection outside of the reserves.

We passed laws prescribing what people can and can’t do; vested interests worked their way around them.

Then we tried to convince people it was in their own vested interest to look after Nature. We tried to put money values on goods and services that Nature provides us. But we continued to ignore the impacts of our economic growth.

Then we created elaborate mechanisms to enable economic growth without harming biodiversity. We began to think in terms of ‘no net loss’. You can develop here if you offset over there.

And now what are we saying? It’s all too much for governments to fix, let the market decide.

Maybe market forces can do something to help Nature. However, after 70 years of trying to save Nature and failing; maybe we should reflect on lessons already learnt before loading up the next silver bullet. Those lessons would include attention to governance, resourcing, inclusion and justice. Ignore these dimensions and there’s little prospect that a market driven approach is going to achieve anything better.

Banner image: Image by Sönke Ehlers from Pixabay



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